Synthetic Economies and the Social Question

Edward Castronova

Abstract

The Social Question, formulated originally by German thinkers such as Gustav von Schmoller, asks what should be done about those who receive relatively fewer material benefits from the current set of economic institutions in society. The answer to the Social Question seems to have been, broadly speaking, social insurance and limited redistribution by the state. And yet a new technology has emerged that may change things. Avatar–mediated communication systems do not actually alter anything fundamental in the way human material inequality is constructed, but they do make certain powers of construction substantially more accessible and easier to see. In almost all multi–user environments on the Internet, ordinary users already create much of the entertainment that is consumed, but there are two types of inequality: First, the total wealth held by users is dramatically, almost breathtakingly unequal. Some users have millions and millions of gold pieces and gear that shines like chrome. Other users have no money at all and gear made of old rags.
Second, the users’ rate of wealth increment per hour or unit of effort is also unequal, though less dramatically so. This article explores the opportunities for experimenting with new ways of addressing the Social Question in virtual worlds. Such experimentation can, in turn, provide models for policy–making by geopolitical governments